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ARDEN HILLS CITY COUNCIL – NOVEMBER 13, 2017 5 This item was moved to the Consent Calendar. B. Health Insurance Benefits Interim Director of Finance and Administrative Services Perrault stated the City was notified that the insurance rates were set to increase by approximately 50% in 2018 with the current carrier. He indicated the benefits broker went out with an RFP to see if a cost savings could be achieved. At the same time, City staff did an internal comparison with surrounding cities to see whether or not the City was competitive with their benefit package. The comparison illustrates two fictional salaries ($50,000 and $100,000), and the current benefits provided by the City and how it compares to other cities. The comparison found Arden Hills is at the low-end when comparing what it contributes to other cities. Interim Director of Finance and Administrative Services Perrault reported City staff has discussed the different plans and benefit levels, and have come to a recommended benefit level and plan. This plan is most similar to the current plan, while still achieving a cost savings. Also, attached are the Public Employees Insurance Plan (PEIP) option and the existing renewal with Blue Cross Blue Shield. The staff recommendation was presented to the Personnel Committee, who generally was supportive of the plan, but still needed further discussion with the full City Council. Interim Director of Finance and Administrative Services Perrault explained City staff has compiled a benefit recommendation for the City Council to consider and the potential impacts. The recommendation would provide the City cover 100% of the single medical and dental premiums (with no change to other provided benefits, such as, short-term and long-term disability) and 85% of the family medical premium. The City would also contribute $2,000 towards an applicable Health Savings Account for both single and family plans. The employee would then be responsible for any other costs related to their medical or dental plans. Interim Director of Finance and Administrative Services Perrault indicated this recommendation would also allow for employees to waive coverages and receive a taxable $300.00 in lieu of the premium benefit, which would lead to a cost savings in the cost of the premium for the City. Please note, the City is recommending using a percent of premium computation when deciding contribution levels. This is because the recommended plan is utilizing age-banded rates and the premium cost varies with the number of dependents, therefore premiums will vary depending on age and family sizes. Another solution is to have a set dollar amount that employees with family coverage would pay, and the City would pay for the rest of the premium, regardless of the dollar amount (for example, an employee with family insurance would always pay $325.00 per month, and the City would pay for the rest of the premium). Due to the timing of the renewals, City Staff respectfully request the City Council determine a benefit contribution level and associated insurance carrier at this meeting. Mayor Grant requested further information on the various plans. Interim Director of Finance and Administrative Services Perrault reviewed the health insurance plan options in further detail with the Council.